Sika Ag · SIX:SIKA
Sika — H1 2018 Earnings Presentation
34 slides from Sika's earnings presentation, Jul 26, 2018
Slide 1: Growth of 13.9% - New Records in Sales and Profit, First Half 2018
GROWTH OF 13.9% - NEW RECORDS IN SALES AND PROFIT FIRST HALF 2018 SIKA INVESTOR PRESENTATION JULY 26, 2018
Slide 2: Highlights First Half 2018
HIGHLIGHTS FIRST HALF 2018 ® BUILDING TRUST Bs
Slide 3: Growth of 13.9% - New Records in Sales and Profit
GROWTH OF 13.9% - NEW RECORDS IN SALES AND PROFIT 1. New records in sales and profit +13.9% sales growth in local currencies (15.9% in CHF) to CHF 3,470.1 million +10.6% higher EBIT to CHF 444.6 million Without one-off costs (related to resolution of dispute with SGO) over-proportional EBIT in
Slide 4: Sika Ends Dispute with SGO and Secures Independence
SIKA ENDS DISPUTE WITH SGO AND SECURES INDEPENDENCE Approval of all proposals at EGM of June 11 Transfer of control premium to all shareholders Transaction EPS accretive to all shareholders Implementation of efficient capital structure Modern governance model Acceleration of Sika’s growt
Slide 5: Key Figures First Half 2018
KEY FIGURES FIRST HALF 2018 RECORD RESULTS – STRONG MOMENTUM CONTINUES in CHF mn 2017 2018 Δ% Net sales 2,994.9 3,470.1 +15.9% Gross results as % of net sales 55.1 53.6 EBITDA 488.2 544.8 +11.6% EBIT 402.1 444.6 +10.6% Net profit 285.7 318.2 +11.4% Operating free cash flow 63.0 11.5 ROCE in % 28.0 2
Slide 6: First Half Sales Growth 13.9%
FIRST HALF SALES GROWTH 13.9% SALES GROWTH IN THE FIRST HALF 2018 16% 13.9% 14% 12% 10% 7.1% 7.6% 8.1% 8% 6% 1.6% 2.4% in LC acquisition 4% 6.0% 5.7% 6.8% organic 2% 0% 1HY 2016 1HY 2017 1HY 2018 in CHF mn 1HY 2016 1HY 2017 1HY 2018 Net sales 2,806.2 2,994.9 3,470.1 6
Slide 7: Sales First Half 2018 - Growth in All Regions
SALES FIRST HALF 2018 GROWTH IN ALL REGIONS +19.7% +9.5% +5.7% +32.0% Growth in CHF +13.6% +13.6% +5.0% +28.5% Growth in LC 6.1% -4.1% +0.7% +3.5% FX impact +7.5% +5.1% +0.0% +20.7% Acquisition 24% 76% Construction Industry EMEA Americas Asia/Pacific Global Business 7
Slide 8: Strong Growth Momentum Continues in 2018
STRONG GROWTH MOMENTUM CONTINUES IN 2018 13.9% SALES GROWTH (15.9% IN CHF) + 13.6% + 5.0% + 28.5% + 13.6% 559 464 889 Asia/Pacific 1,558 Global Business Americas EMEA 6M 2017 6M 2018 (in CHF mn, growth in LC) 8
Slide 9: Six-Year Overview - Half-Year Figures
SIX-YEAR OVERVIEW – HALF-YEAR FIGURES CONTINUOUSLY IMPROVING PROFIT 9
Slide 10: Successful Strategy Execution
SUCCESSFUL STRATEGY EXECUTION
Slide 11: Sika's Growth Model Delivers Key Investments Since 2015
SIKA’S GROWTH MODEL DELIVERS KEY INVESTMENTS SINCE 2015 - Successful Target Market concept Market Penetration - Megatrends driving growth - 217 new patents filed Innovation - 20 Global Technology Centers Emerging Markets - 28 new plants opened - 11 new national subsidiaries Acquisitions
Slide 12: Sika's Growth Model Delivers Continued Growth in Sales and Profit
SIKA’S GROWTH MODEL DELIVERS CONTINUED GROWTH IN SALES AND PROFIT (FULL YEAR) NET SALES NET 7000 SALES 16.0% EBIT 1100 14.3% 16.0% 1000 13.8% % growth in local currencies as % of net sales 14.0% 6500 14.0% 900 12.3% 5.3% 9.4% 13.0% 6.2% 5.5% 9.0% 11.4% 12.0% 800 12.0% 6000 10.2% 700 10.0% 9.0% 10.0%
Slide 13: Market Penetration
MARKET PENETRATION ® BUILDING TRUST Bs
Slide 14: Sika's Subsidiaries
SIKA’S 101 SUBSIDIARIES HONDURAS - 2018 14
Slide 15: Sika's Market Potential
SIKA’S MARKET POTENTIAL LARGE AND GROWING MARKET SEGMENTS TOTAL MARKET SIZE 2017 2020 > CHF 70 BILLION CHF 80 BILLION INDUSTRY CONCRETE INDUSTRY CONCRETE WATER- FLOORING WATER- PROOFING FLOORING PROOFING ROOFING ROOFING SEALING & SEALING & BONDING BONDING REFURBISHMENT REFURBISHMENT 15
Slide 16: Megatrends Drive Our Growth
MEGATRENDS DRIVE OUR GROWTH URBANIZATION, NEW VEHICLE DESIGN AND SUSTAINABILITY New modular Increasing world vehicle population with Increased safety, fire, manufacturing urbanization and water, earthquake and concepts need fast, megacities quality requirements high strength bonding systems Rising d
Slide 17: Market Penetration - Focus on Attractive Markets
MARKET PENETRATION - FOCUS ON ATTRACTIVE MARKETS: CROSS-SELLING, LIFE-CYCLE MANAGEMENT, A STRONG BRAND Concrete Waterproofing Roofing Flooring & Coating Sealing & Bonding Refurbishment Industry 17
Slide 18: Sika's Market Potential
GROWTH MODEL WITH EARLY MARKET PENETRATION FROM NEW BUILD TO REFURBISHMENT SIKA HAS SOLUTIONS FOR ALL MARKETS Long-term market potential Sika Repair and Sika’s market potential refurbishment Higher building standards Infrastructure Emerging markets Developing markets Mature markets 18
Slide 19: Innovation
INNOVATION ® BUILDING TRUST Bs
Slide 20: Innovation Strong Track Record
INNOVATION STRONG TRACK RECORD More than 217 900 283 20 patents were employees are invention Technology filed since dedicated to disclosures Centers 2015 Research and Since 2015 worldwide Development 20
Slide 21: From Patents to World Class Products
FROM PATENTS TO WORLD CLASS PRODUCTS INNOVATION INCREASES SALES AND PROFIT +20% ANNUAL ORGANIC 217 SALES GROWTH = INCREASE 1,243 NEW PRODUCTS 30% NEW PATENTS ANNUAL EBIT LAUNCHED SINCE SINCE 2015 2015 CONTRIBUTION 21
Slide 22: Accelerated Build-Up of Emerging Markets
ACCELERATED BUILD-UP OF EMERGING MARKETS
Slide 23: Emerging Markets Build-Up Since 2015
EMERGING MARKETS BUILD-UP SINCE 2015 CAPTURING GROWTH POTENTIAL IN NEW MARKETS 28 5 11 36% new acquisitions new of sales in plants national emerging markets opened subsidiaries 23
Slide 24: Acquisitions
ACQUISITIONS ® BUILDING TRUST Bs
Slide 25: Sika Will Act as Market Consolidator
SIKA WILL ACT AS MARKET CONSOLIDATOR FRAGMENTATION OFFERS ACQUISITION OPPORTUNITIES CONSTRUCTION CHEMICAL MARKET 2017 > CHF 60 BILLION Sika Top 10 companies with a combined market share of 40% Other 25
Slide 26: Acquisitions Since 2015
ACQUISITIONS SINCE 2015 GROWTH PLATFORMS FOR THE FUTURE In all In all 17 705 7 4 acquisitions million CHF Target regions additional Markets turnover 26
Slide 27: Values and Principles
VALUES AND PRINCIPLES ® BUILDING TRUST Bs
Slide 28: Sika's Values and Principles
SIKA’S VALUES AND PRINCIPLES STRONG CORPORATE CULTURE Customer first Courage for innovation Sustainability & integrity Empowerment and respect Manage for results 28
Slide 29: Targets 2020
TARGETS 2020 ® BUILDING TRUST Bs
Slide 30: Sika's Growth Strategy 2020 Confirmed
SIKA’S GROWTH STRATEGY 2020 CONFIRMED TO BE REVIEWED AND UPDATED IN 2019 MARKET PENETRATION 6 - 8% ANNUAL GROWTH 30 NEW PLANTS INNOVATION 105 NATIONAL SUBSIDIARIES EMERGING MARKETS 14 - 16% EBIT MARGIN PER YEAR ACQUISITIONS > 10% OPERATING FREE CASH FLOW PER YEAR VALUES > 25% ROCE PER YEAR 30
Slide 31: Outlook 2018
OUTLOOK 2018 ® BUILDING TRUST Bs
Slide 32: Strong Outlook for 2018
STRONG OUTLOOK FOR 2018 CONTINUATION OF SUCCESSFUL GROWTH STRATEGY Sales increase of more than 10% expected with a sales target of CHF 7 billion in 2018 Volatile and rising raw material prices will continue to be a challenge Overproportional growth in profit expected for the year 2018 as a who
Slide 33: Thank You for Your Attention
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Slide 34: Forward-Looking Statement
FORWARD-LOOKING STATEMENT This presentation contains certain forward-looking statements. These forward-looking statements may be identified by words such as ‘expects’, ‘believes’, ‘estimates’, ‘anticipates’, ‘projects’, ‘intends’, ‘should’, ‘seeks’, ‘future’ or similar expressions or by discussion o